BofA April Global Fund Manager Survey: Most Bearish, But Positioning Still Long
AI summary card
BofA April Global Fund Manager Survey: Most Bearish, But Positioning Still Long
The April FMS shows investors turning materially more cautious on growth, inflation, and geopolitical risk, but without a classic recession-style rush into cash; hence the conclusion is 'bearish and still long.'
- The FMS composite sentiment indicator fell from 5.6 to 3.7, the most bearish reading since June 2025.
- Global growth expectations flipped from net 7% expecting strength to net 36% expecting weakness, while net 69% of investors expect global CPI to rise over the next 12 months.
- 52% of investors believe a soft landing is the most likely global economic outcome, 32% expect no landing, and only 9% expect a hard landing.
- Cash levels stand at 4.3%, higher than since May 2025 but still below historical stress peaks; global equities remain a net 13% overweight.
- The most crowded trades are tied between long oil and long global semiconductors, both at 24%.
- The top tail risk is geopolitical conflict, selected by 44% of investors; 57% think U.S. shadow banking or private credit is the most likely source of a systemic credit event.
Report interpretation
Overview
Bank of America’s April 2026 Global Fund Manager Survey covered 193 respondents with a combined AUM of USD 563 billion; 170 respondents managing USD 511 billion participated in the global FMS questions, and 90 respondents managing USD 247 billion participated in the regional FMS questions. The core message is 'Bearish and Long': macro sentiment has weakened significantly, growth expectations, earnings expectations, and risk appetite have all declined, but positioning has not fully shifted to defense, with global equities, technology, emerging markets, cash, and some cyclical assets still net overweight.
Core views
The report argues that the April survey is a contrarian signal, but not a blind-buy signal. Conditions that would support risk assets include oil prices falling below USD 84/bbl on a ceasefire or geopolitical easing, inflation cooling, central bank rate cuts, and earnings upside surprises. However, because cash has not surged and investors are still long global equities, markets will need support from both rates and earnings to keep making new highs. At the macro level, investors are framing the base case as a soft landing or no landing rather than a hard landing; however, stagflation expectations have clearly increased, with 76% expecting below-trend growth and above-trend inflation.
Analysis framework
The report is based on the monthly results of the BofA Global Fund Manager Survey, tracking cash levels, equity allocation, growth expectations, inflation expectations, rate expectations, regional and sector allocation, crowded trades, and tail risks, while using long-run averages, standard deviations, historical lows, and month-over-month changes to judge whether sentiment and positioning are excessive.
Methodology notes
Global fund manager survey
A monthly survey that aggregates global institutional investors’ views on macro, rates, risk, asset allocation, regions, and sectors, used to identify risk appetite, rotation opportunities, and tactical entry points.
Bull & Bear Indicator
The report notes that cash levels are one of the inputs to this indicator; the indicator fell from 6.3 to 6.1 in this round and is used to help assess whether market risk appetite is too hot or too cold.
Financial market stability risk indicator
This indicator is built as a z-score from survey responses about potential financial stability risks and is intended only as an indicative measure, not as a benchmark or a gauge of financial instrument performance.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Global equitiesStill a net overweight overall, but allocation has declined materially
- Strengths
- Extreme pessimism can create contrarian support; hard landing probability is only 9%.
- Weaknesses
- Growth and earnings expectations are falling, and the global equity overweight has narrowed from 37% to 13%.
- Comparison
- Current overweight is the lowest since July 2025, but not yet at the extreme lows seen in April 2025 and September 2022.
- Risks
- If rate cuts and earnings beats do not materialize, new highs in equities will be hard to sustain.
- BondsLikely to benefit from rate cuts and slower-growth expectations
- Strengths
- The report says the Q2 bull-market surprise would include falling oil prices, lower inflation, and rate cuts, which are most favorable for bonds.
- Weaknesses
- For the first time since 2022, investors expect global short rates to rise, and ECB rate-hike expectations are relatively strong.
- Comparison
- Bond positioning is net 33% underweight, a slight improvement from net 36% underweight last month.
- Risks
- Rising inflation and a hawkish central bank stance would limit bond performance.
- CashDefensive allocation has increased, but not to crisis levels
- Strengths
- Cash positioning is a net 20% overweight, and the 4.3% cash level reflects higher defensiveness.
- Weaknesses
- Cash remains below prior stress-period peaks and does not amount to a strong buy signal.
- Comparison
- Below 4.8% in April 2025 and 6.3% in October 2022.
- Risks
- If risk events escalate, demand for cash may continue to rise and pressure risk assets.
- Crude oil / EnergyOil prices are the key variable for whether risk assets can rebound
- Strengths
- Energy allocation moved from a net 2% underweight to a net 4% overweight, and the oil price expectation for year-end 2026 is USD 84/bbl.
- Weaknesses
- Long oil is one of the most crowded trades, with a 24% crowding reading.
- Comparison
- The report sees oil below USD 84/bbl as an important condition for contrarian support to risk assets.
- Risks
- Geopolitical conflict pushing oil higher would intensify inflation and growth pressure.
- Global semiconductorsSupported by higher technology allocation, but the trade is crowded
- Strengths
- Technology stocks are net 14% overweight, up from a net 7% overweight last month.
- Weaknesses
- Long global semiconductors is tied with long oil as the most crowded trade, at 24%.
- Comparison
- Market leadership over the past several years has mainly come from technology and banks.
- Risks
- Crowded trades can de-risk quickly when risk appetite fades or AI expectations cool.
- Emerging market equitiesStill meaningfully overweight, but vulnerable to bearish surprises
- Strengths
- Investors are still net 41% overweight emerging market equities.
- Weaknesses
- Down from net 53% overweight last month.
- Comparison
- The report says emerging market equities are among the assets most pressured if recession risk rises.
- Risks
- A weaker dollar, slower global growth, and deteriorating risk appetite would hurt performance.
- Japanese equitiesMoved from overweight to underweight, but could benefit in a bull-market surprise
- Strengths
- The report says the Q2 bull-market surprise of lower oil, lower inflation, and rate cuts would benefit Japanese equities.
- Weaknesses
- Japanese equities moved from a net 14% overweight last month to a net 11% underweight, a notable rotation out.
- Comparison
- This is the first significant underweight since November 2024.
- Risks
- Lower global risk appetite or insufficient local earnings would limit any rebound.
- REITs / Real estatePotential beneficiary of rate cuts, but still underweight
- Strengths
- If rates fall, REITs would benefit from the bull-market surprise set out in the report.
- Weaknesses
- Real estate allocation is a net 18% underweight, slightly wider than the 16% underweight last month.
- Comparison
- Like bonds, it is highly sensitive to the rate path.
- Risks
- Persistently high rates or rising credit risk would weigh on valuations.
Key data
- Survey sample193 respondents, USD 563 billion AUMThe survey period was April 2 to 9, 2026; about three-quarters of respondents answered before the April 8 ceasefire announcement.
- FMS sentiment indicator3.7Down sharply from 5.6, the most bearish reading since June 2025.
- Cash level4.3%The highest since May 2025, but below the 4.8% peak in April 2025 and the 6.3% peak in October 2022.
- Global growth expectationsNet -36%Flipped from net 7% expecting strength last month to net 36% expecting weakness, the lowest since August 2025.
- Global inflation expectationsNet 69% expect CPI to rise over the next 12 monthsCompared with net 45% last month.
- Economic scenarioSoft landing 52%, no landing 32%, hard landing 9%Most investors still do not see recession as the base case.
- Global equity allocationNet 13% overweightDown from a net 37% overweight last month, the lowest overweight since July 2025.
- Global earnings expectationsNet -14%The first time since September 2025 that global profits are expected to weaken.
- Fed expectations58% expect rate cuts over the next 12 monthsAnother 10% expect rate hikes.
- ECB expectations46% expect rate hikes over the next 12 monthsIndicates a more hawkish rate outlook in Europe.
- Year-end 2026 oil price expectationUSD 84/bblOn a weighted-average basis, this implies a 38% increase from Brent at USD 61/bbl at the start of 2026.
- Top tail riskGeopolitical conflict 44%Up from 14% in February and 37% last month.
- Most crowded tradesLong oil 24%; long global semiconductors 24%The two are tied for first.
- Source of a systemic credit eventU.S. shadow banking/private credit 57%Respondents viewed this as the most likely source.
- U.S. equity valuationNet 64% say overvaluedThe lowest overvaluation reading since February 2019.
Impact & implications
In terms of investment implications, the report suggests that risk assets are in a complicated state: bearish macro expectations and weak sentiment provide contrarian support, but positions have not fully washed out and trades such as oil and semiconductors are already crowded. If oil declines, inflation eases, and rate cuts follow, bonds, consumer discretionary, REITs, and Japanese equities could benefit; if recession risk continues to rise, commodities, materials, and emerging-market equities are more likely to come under pressure.
Risks
- Geopolitical conflict is the top tail risk and could drive oil higher while intensifying inflation pressure.
- Stagflation expectations are rising, with 76% of investors expecting the combination of weak growth and high inflation.
- Credit risk is increasing, with a net 65% saying credit default risk is above normal.
- U.S. shadow banking and private credit are seen by 57% of investors as the most likely source of a systemic credit event.
- Long oil and long global semiconductors are both among the most crowded trades and face reversal risk.
- If Fed rate cuts, lower oil prices, and earnings beats do not materialize, risk assets will struggle to keep making new highs.
What to watch
- Whether Brent or oil prices fall below the USD 84/bbl threshold highlighted in the report.
- Whether expectations for Fed rate cuts over the next 12 months are realized and whether the ECB turns more hawkish.
- Whether global CPI expectations and stagflation expectations continue to rise.
- Whether global earnings expectations improve from net -14%.
- Whether cash levels continue to rise from 4.3% and develop into a true risk-off wave.
- Whether positions in global equities, technology, semiconductors, and emerging markets de-crowd further.
- Whether geopolitical conflict, expectations for the U.S. midterm elections, and private credit risk trigger a new risk premium.